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Supreme Court allows employer class action lawsuit ban

Last week, the U.S. Supreme Court made a ruling in one of the longest debated cases of the session. In a 5:4 decision, the Court ruled that an employer may prevent its employees from joining in a class action lawsuit against the employer. Under the terms of many employment contracts, this decision prevents a vulnerable employee from pursuing litigation altogether--forcing them instead to resolve disputes through arbitration.

The decision was met with strong criticism by employee advocates. Justice Ruth Bader Ginsburg--one of the dissenting justices in the case--called the ruling "egregiously wrong" and petitioned congress to rectify the Court's action. Other critics expressed concern that the ruling will limit exploited employees' access to protection and justice.

What's wrong with arbitration?

Arbitration is a form of alternative dispute resolution in which the employer and employee meet with an arbitrator--typically a retired lawyer or judge--in private. Each party presents an abbreviated summary of evidence to the arbitrator, who in turn makes a decision on corrective action. The process is shorter than litigation and eliminates the need for a trial.

While at first glance, arbitration may seem like an easier way to resolve conflicts, in employment cases, in can disadvantage the employee in a number of ways:

  • No jury: By avoiding a trial, an employee loses the opportunity to present their case in front of a jury of their peers. Historically, juries tend to sympathize with employees in employment disputes.
  • Evidence:Under the procedural rules for arbitration, each party is only allowed to request a limited amount of evidence from the other party to build their case. This factor can advantage the employer, who tends to have access to a greater supply of relevant evidence.
  • Finality: If the arbitrator rules against you, the decision is final. Unlike with litigation, there is no appeals process.

If you have concerns about your employer's arbitration policy or the implications of the recent amendment to federal legislation, it's worth talking to an experienced employment law attorney. Just because there may be limits on your legal recourse doesn't mean you should accept unfair treatment in the workplace.

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